Feds Quarles: Important to focus on size of fed balance sheet relative to GDP, not on absolute size

Vice-Chair and Fed’s Quarles says transition away from LIBOR rate needs to be accelerated in comments further to what we heard earlier.

Key notes

Quarles says there was plenty of cash in banking system in September but it wouldn’t move to where it was needed.
Quarles says unexpected friction in the movement of cash suggests more reserves are needed.
Quarles says it’s important to focus on size of Fed balance sheet relative to GDP, not on absolute size.
Quarles says he is not convinced consumer inflation expectations are declining.